Parity: Cheaper trips but lower incomes

Posted by Grant Robertson on April 07, 2015

The Kiwi dollar’s near-parity with the Australian means some tourists will have cheaper Gold Coast holidays but New Zealand incomes will stay lower for longer, making it harder for many to afford the trip, says Labour’s Finance spokesperson Grant Robertson.

“New Zealanders want to earn more. To do that we need to sell quality products for good prices overseas. A Kiwi dollar equal to the Aussie – our biggest trading partner – holds our exporters and incomes back.

“There’s no point in being able to spend relatively more money at Surfers’ Paradise if you don’t earn enough to save for the airfare.

“The real parity we need to work towards is parity of incomes. That’s when it’s time to have a parity party. But the higher our dollar is, the lower our incomes are.

“The Reserve Bank Governor and the IMF have said our dollar is around 15 per cent overvalued. John Key says there’s nothing he can do. He’s wrong.

“The problem is the Reserve Bank needs to keep our interest rates higher than almost any other developed country to stop the housing crisis from exploding.

“If the Government stopped sitting on its hands and built more houses, Graeme Wheeler would have more scope to lower interest rates and take the pressure off our dollar.

“Only that way will our exporters, who are the real wealth creators, be able to compete on a level playing field and create good jobs and higher incomes,” says Grant Robertson.